CHARLESTON, S.C. - Blackbaud (NASDAQ: NASDAQ:BLKB), a software provider committed to social impact with a market capitalization of $3.98 billion and revenue growth of 5.81% over the last twelve months, announced it will record a noncash impairment charge of up to approximately $415 million for its EVERFI asset group. The charge, disclosed in a Form 8-K filing with the United States Securities and Exchange Commission (SEC) today, will be recorded during the fourth quarter of 2024.
The company revealed that EVERFI has been performing below expectations, leading to the consideration of various alternatives for the business, including a potential sale. According to Blackbaud's president, CEO, and vice chairman Mike Gianoni, the impairment charge is a step to align with generally accepted accounting principles. InvestingPro data shows that four analysts have recently revised their earnings expectations downward for the upcoming period, though net income is still expected to grow this year.
Gianoni emphasized that EVERFI continues to support its customers effectively, focusing on education and workplace solutions addressing today's social issues. He also reassured stakeholders of Blackbaud's robust core business and its commitment to aiding customers worldwide in using technology to drive social impact.
The decision for the impairment charge comes as Blackbaud evaluates its strategic approach to the EVERFI business, with further updates promised as the process unfolds.
Blackbaud, recognized as a leader in its field, provides essential software for the nonprofit and education sectors, as well as companies and individuals dedicated to social responsibility. The company's platforms are responsible for managing or directing over $100 billion annually, supporting users in more than 100 countries. With a robust gross profit margin of 55.21%, InvestingPro analysis suggests the stock is currently trading below its Fair Value, despite trading at a P/E ratio of 78.05. Get access to 10+ additional exclusive ProTips and comprehensive financial analysis through an InvestingPro subscription.
The press release also included cautionary statements regarding forward-looking information, advising that actual results could differ due to various risks and uncertainties. Blackbaud has stated that it does not intend to update these forward-looking statements unless required by law.
This update is based on a press release statement from Blackbaud.
In other recent news, Blackbaud, a cloud software company, has reported several significant developments. The company announced a 6.6% increase in overall revenue and a 6.8% rise in contractual recurring revenue in its Third Quarter 2024 Earnings Conference Call, primarily driven by its Social Sector. However, due to a 26% drop in revenue from its EVERFI segment, Blackbaud has revised its annual revenue guidance to $1.150 billion to $1.160 billion. The company also predicts an adjusted EBITDA margin within the ranges of 33% to 34% and non-GAAP earnings per share between $3.98 to $4.16.
In analyst news, Baird has updated its outlook for Blackbaud, downgrading the stock from Outperform to Neutral and reducing the price target to $80 from the previous $92. This decision was influenced by a general reset in growth expectations and a revised outlook for Blackbaud's core Social Sector.
In other company developments, Blackbaud plans to spin out the underperforming EVERFI segment, with Goldman Sachs (NYSE:GS) advising on strategic options. The company also continues its stock repurchase strategy, aiming to buy back up to 10% of its common stock by year-end. Additionally, Blackbaud has appointed former US Cyber Command chief to its board, a move that is expected to bolster the company's cybersecurity practices. These are the recent developments in Blackbaud's operations.
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